The International Finance Corporation (IFC) has announced a R325 million loan to residential property developer, Alleyroads, to build 1 000 plus rental apartments in Johannesburg.
The investment will assist Alleyroads finance construction of the apartments which will assist in reducing the housing gap in Johannesburg’s affordable housing market, particularly in the R4000 to R6000 per month rental segment, aimed at lower- to-middle income households with an average annual salary of R238 000.
The units will consist of two bedrooms each at an average size of 62m2 and will be built near hospitals, schools, and markets. Project completion is scheduled for 2023.
“The Group is extremely thankful to IFC for having the confidence in our ability to deliver these much-needed housing units to this sector of the residential market. The team is ready to roll up their sleeves and ensure the timely delivery of excellent quality units,” said Ivan Pretorius, Managing Director of the Alleyroads Group.
“Affordable rental housing is essential for improving quality of life in South Africa, particularly for younger people and those that do not qualify for or cannot afford a mortgage. IFC’s investment in Alleyroads will improve access to good-quality, affordable residential housing in South Africa, which is positively linked to social benefits like better education and health outcomes,” said Adamou Labara, IFC Country Manager for South Africa.
The apartments will be designed to meet IFC’s EDGE Advanced green building standards, which makes them zero carbon ready and among the first residential units to achieve such a high resource efficiency in sub-Saharan Africa. Alleyroads will install on-site solar panels to supply about 30% of the development’s energy needs.
“The transaction represents a significant milestone in the evolution of the Alleyroads Group and signals the intention of the company to be one of the pre-eminent leaders in the affordable residential housing market. We look forward to a continued partnership with Alleyroads and IFC”, said Mesh Pillay, Chief Executive of YW Capital, exclusive advisor to Alleyroads.
